The generation of revenue and profit is the driving force behind most business models. To supplement the cash purchasing methods in today's credit-based society, most businesses depend on some form of credit or entitlement authorization mechanism allowing for customers to purchase products, services, or other such items without the immediate physical exchange of cash. Inherent in such business models is the reality that a percentage of parties who purchase on credit or entitlement authorizations may eventually not pay, thus diminishing the business' overall profitability.
In order to balance the risk of such losses against the benefits of maintaining credit entitlement systems, businesses go to great lengths in making credit worthiness or other transaction authorization/verification determinations (collectively referred to herein as “transaction authorization determinations”), such as requiring lengthy applications including a wealth of personal information, accessing databases storing information about the potential borrower, and the like. This process is typically relatively slow and often-times results in a poor transaction authorization determination. For example, in order to minimize losses associated with poor credit risks, a transaction authorization determination implemented according to many business models may error on the conservative side, thereby foregoing a transaction having a collectable debt situation associated therewith because of a lack of information or insufficient analysis of decision criteria.
One example of a business model that requires not only that there be a transaction authorization determination made, but that such transaction authorization determinations be made very quickly, is the telecommunication provider industry. Of particular interest in such telecommunication provider transaction authorization determinations are the determinations made with respect to services provided in association with areas of relatively high volume reverse-charged and/or third-party-charged calls (referred to collectively herein as “collect calls”), where such calls tend to be associated with individuals or entities of dubious credit merit.
Telecommunication services provided with respect to controlled-environment facilities, such as prisons, is one such area of relatively high volume collect calls where the credit worthiness of the individuals involved is suspect. Prisoners are generally given some form of access to telephones, but the calls must be paid for. However, prisoners, in general, do not have ready access to cash; therefore, calls are typically made collect. As with other credit/authorization systems, some of the collect calls may never be paid for by the responsible parties, i.e., the called parties or indicated third parties. In such circumstances, the telecommunication service provider fails to recover the costs of providing the call, which, in turn, causes a loss of profitability.
Bad debt losses may sometimes reach into the tens of millions of dollars for each telecommunication service provider with the industry total well over $1 billion. To address the risk of loss on some of the attempted calls, telecommunication service providers sometimes obtain information and/or store information with respect to the called parties in order to provide call verification/authorization.
For example, when an inmate at a particular correctional facility attempts to make a collect call, the call or transaction request may go through a validation process. The telecommunication service provider may access its own customer database and/or an external database, such as a line information database (LIDB), to determine (1) can this call be billed (i.e., is there a billing arrangement with the local exchange carrier (LEC) or the called party), (2) if the destination number is already in the service provider's files, has the allotted credit limit been reached, and (3) has there been any information received from the LEC indicating that the called party has not been paying its bills. Depending on the extensiveness of the service provider's internal resources, the service provider may not be able to determine all three of these validation criteria. If favorable information is retrieved for each of the available validation criteria, the call may be completed. Conversely, if the inmate attempts to call a destination number that is not already on the customer database, or negative information is retrieved from the validation process, the service provider typically blocks the call from being completed.
While the above-mentioned blocked calls save the telecommunication provider from losses for unpaid calls, some of those blocked calls represent lost potential revenue and profit that the provider would have generated. Most solutions that have been used to address this problem have been post the first transaction. That is, when there is a telecommunications demand to a telephone number that is blocked, any mechanisms to try to obtain revenue instead of blocking future transactions, such as a customer service representative placing a call to the blocked number in an attempt to establish a business relationship, are implemented after the transaction has been blocked.
Accordingly, a need exists in the art for the making of reliable transaction authorization determinations which do not unnecessarily block transactions. Moreover, a need exists for such reliable transaction authorization determinations to be made rapidly, such as during real-time processing of a transaction.